Even as political masters are working overtime to shield kerosene from a price hike, a study by the National Council of Applied Economic Research (NCAER) reveals that more than half its consumers are willing to pay more, provided the supply improves.Before the scramble began for raising the prices of petrol and diesel, the NCAER informed the Petroleum Ministry that its impact assessment study revealed that “60.1 per cent of households are willing to pay more for kerosene if the same is made available in fair-price shops”. While evaluating the Jan Kerosene Pariyojana on May 7, the research group apprised the ministry that on an average, people were willing to pay Rs 1.40 more per litre. While 10.2 per cent were willing to pay Rs 1-2 extra per litre for the cooking and lighting fuel, 18.5 per cent were ready to pay Rs 3-4 more and 31.3 per cent Rs 5 or more.Kerosene is sold at Rs 9.09 per litre through the fair price shops with the state-run oil marketing companies suffering a loss of Rs 27.62 per litre even after a subsidy of Rs 0.83 per litre from the Government out of the Central Budget. However, this willingness to pay more does not figure in the proposal prepared by the Petroleum Ministry to bail out the OMCs that are expected to lose Rs 2,25,000 crore during the current fiscal for selling petrol, diesel, kerosene and cooking gas LPG below costs.The ministry has kept kerosene out of the loop while suggesting that price of petrol be raised by Rs 5 per litre, diesel by Rs 3 per litre, and LPG cylinder by Rs 50 litre to recover Rs 21,440 crore from the consumers for the OMCs. The ministry is proposing to the Cabinet that the Finance Ministry reduce excise on petrol and diesel by Rs 2 per litre to raise Rs 12,350 crore and cut customs duty on crude oil, petrol and diesel by 2.5 per cent to raise Rs 5,450 crore.The JKP was launched on a pilot basis by former Petroleum Minister Mani Shankar Aiyar in October 2005 to improve the public distribution network and kerosene delivery. It was proposed to cover 441 blocks throughout the country, but is now implemented in 316 blocks spread over 12 states. Under the scheme, kerosene supplies to wholesalers are under the direct supervision and responsibility of OMCs with Panchayati Raj institutions acting as watchdog for monitoring its implementation.
